Noah Lewis, Managing Director of GE Ventures

Noah Lewis is Managing Director of GE Ventures, the venture capital subsidy of General Electric. The firm focuses on a number of markets, including energy and manufacturing, but is recognized as a leading investor in digital health, having backed companies ranging from Arcadia to Iora Health. At Convergence, Lewis will describe the investment thesis that GE Ventures uses to assess investment opportunities that support provider-payer convergence initiatives.

This is the first in a series of interviews that Chilmark Research will conduct with Convergence speakers prior to the event. The interview has been lightly edited for grammar and clarity.

Why is it important for the healthcare industry to take the emergence of provider-payer convergence seriously? What do you see in your work that makes this important to you?

As the healthcare economy moves from fee for service (FFS) to value-based care (VBC), in essence what you have is a shift from paying per piece item to paying for collaboration. The current business models of existing stakeholders just don’t have the capability to do what I call “shared math.” You’ve got high fragmentation, where each entity is optimizing for its own financial outcome….If you think about it from a math perspective, everyone is being forced to solve multivariable equations, and they don’t control all the variables.

Healthcare, at the end of the day, has a scale problem. The entire payment and measurement system is being changed, and all those stakeholders are being forced to do more collaborative math, and they’re being forced to do that at scale. When you move beyond 5%, 10%, 15% of patients, when you start moving the numbers up, all the systems break. It’s a classic enterprise software problem – more complex math, across more disparate enterprises and systems, and at scale – but in healthcare everything is done retrospectively, where 120 days is fast. You can’t win financially or clinically with woulda, coulda, shoulda. You need to see what’s going on and take corrective action today.

Which stakeholders need to be at the table when strategic conversations about convergence take place?

In name only, payers and providers are the two big buckets. But if you unpack that, it’s becoming a many-to-many world. In any given city, you have multiple payers with multiple populations working across a fragmented set of providers. Some are post-acute care providers who are affiliated but not controlled. Others are ambulatory. There are so many types of providers who service each other, and those same providers are working with multiple payers. There are so many permutations that people have to solve for. It’s forcing collaboration from many payers and providers.

Healthcare, at the end of the day, has a scale problem. The entire payment and measurement system is being changed… It’s a classic enterprise software problem, but in healthcare everything is done retrospectively, where 120 days is fast. You can’t win financially or clinically with woulda, coulda, shoulda. You need to see what’s going on and take corrective action today.

How is your organization beginning to focus on convergence? How widespread is the effort?

At GE Ventures, we’ve been investing around convergence for over 5 years now. This was a very intentional market strategy. We’re investing for where the market will be, not where the market is. After many head fakes in healthcare, we were exactly on time. We’re excited to see everything come together.

Are you prioritizing convergence of data ingestion, analytics, care management, or patient engagement? Which of these key area(s) are you focused on? 

The main issue is one of workflow and value chains. To solve workflow and value chain issues, you need to invest in platforms. We have intentionally avoided investing in point solutions such as disease-specific analytics companies or care management modules. We have invested in companies with deep domain service, tech-enabled platforms, and software – companies that are looking to automate, add intelligence, and add scalability.

  • Arcadia can enable a 50,000-foot view to a 50-foot view of the workflow in ambulatory value chains.
  • Apervita is the Slack of healthcare analytics, enabling bidirectional flow and data exchange. It’s offering micro-services that enable cross-boundary analytics.
  • Aver Informatics is digitizing bundled payments, going upstream and downstream.

It’s all about wing-to-wing platforms that can land and expand.

Do you think the roadblocks to broader acceptance of convergence are more strategic, tactical, operational, or cultural in nature? What are some of the roadblocks you’re encountering?

Healthcare tends to throw labor at problems first. Part of the challenge is, everyone’s busy and has blown their wallets on EHR implementations. That’s been a bottleneck for further technology adoption. Plus, organizations are going to try to do this with people and Microsoft Excel. That only goes so far, and it doesn’t scale. It comes down to how many patients across how many relationships they do this math for, and it’s not scalable. Once they see lower clinical performance and financial performance, once they are losing the upside or getting penalized on the downside, then they begin to invest in technology.

Convergence and value-based care are closely linked. What will it take for the industry to accelerate the shift toward value-based care?

It’s going to happen as it is today. MACRA is going to be a forcing function. It’s a matter of how soon providers identify that their system is broken and they realize they can’t get the carrot or feel the stick. MACRA roll out will lower the water, as the Warren Buffett expression goes, and you’ll see who’s wearing a bathing suit. That’s going to drive purchases and behavior.

Commercial payers have been attempting to do this for a long time, through initiatives such as disease management. Providers have been laggards. MACRA is changing fundamentally the payment models. This will be a payer-driven process, for sure.

What are the major non-technical barriers to achieving convergence?

Culture is a huge deal here. You’ve seen the Kaisers of the world build a culture driven around collaboration and outcomes. It’s a C-level decision: “We are shifting to this approach.” A lot of organizations are on the spectrum, and it comes down to the percentage of business they do that way. It’s 5% to 15% for most health systems. As that grows, we will see more and more adoption.

Even with all the software in the world, you’re not going to change culture. It’s about change management and ease of adoption. Here’s where you focus on workflow, the user interface, and getting away from doctor “screen time” to full collaboration. You have to help organizations help themselves. A lot of technology has struggled with this. You see lot of shelfware that doesn’t get renewed because it doesn’t get adopted.

What do you look for when you assess potential investment opportunities?

We’ve been early investors in many companies: Apervita, Arcadia, Aver, Gravie, Health Reveal, Iora Health, SilverVue, and Valence Health. We look for specific use cases around actual customer segments with particular financial and clinical pains tied to a specific payer mix. An ambulatory health system with a pain around Medicare Advantage customers is going to look for a vendor focused on solving that problem. It won’t look at a care management solution – the problem that addresses is too general.

Brian Eastwood

Author Brian Eastwood

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